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J&K Bank to raise Rs 1,000 cr via bonds under Basel III to boost capital

Press Trust of India  |  New Delhi 

State-owned will raise up to Rs 1,000 crore by issuing bonds in one or more tranches.

The will bring the matter before the shareholders in the ensuing annual general meeting to be held on July 7.

As a special business agenda for the AGM, the board of directors will seek permission from shareholders to issue unsecured, redeemable, subordianted, non-convertible, Basel III compliant tier II bonds in the nature debentures for inclusion in tier II captial of the of face value of Rs 10 lakh each aggregating up to Rs 1,000 crore in one or multiple tranches on a private placement basis, the bank said in a regulatory filing.

The bonds, which are to be issued within one year from the date of approval, will be of tenure of up to ten years.

"The implementation of Basel III guidelines has necessitated the need for banks in to augment their capital base. This becomes important as Basel III capital requirements call for increase in quantity and quality of capital, besides providing for capital buffer during economic downturn," the bank said.

The Basel III capital regulations were implemented in with effect from April 1, 2013. Banks have to comply with the regulatory limits and minima as prescribed under Basel III capital regulations, on an ongoing basis.

These capital regulations would be fully implemented by March 31, 2019.

"The need for more capital is also in line with the future business growth that the bank has projected over near to medium term. Further, tier II will supplement tier of the bank and will also have tier II buffer in place so that draw down of earlier raised tier II capital as per BASEL III guidelines is replenished by fresh tier II capital," it further said.

Stock of closed flat at Rs 59 apiece on the today.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, June 14 2018. 22:00 IST